Infotech Enterprises to acquire two US firms; the stock closed the session 2.81% lower.

Wipro launches second facility in China; the stock sheds 2.22%.

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Global signals

Following negative Asian cues, European markets opened with heavy losses of over 2% each. Debt problems in Dubai dragged the banking stocks while the mining and energy stocks slid on lower commodity prices. Major Asian indices that opened mixed closed in red with losses of 0.03-3.62% each. SGX Nifty fell by 106 points.

Today, the US markets are closed for the Thanksgiving holiday.

Indian indices

The day of expiry of November futures contracts was marked with heavy bloodshed on the Dalal Street. The Sensex that opened almost flat, slumped in the mid-session as global indicators turned heavily negative, while the expiry brought heavy selling in banking and oil & gas stocks that fell the most losing over 2%. The Sensex closed the session well below the significant psychological level of 17000 on a day when the markets recorded highest ever turnover and closed at 16855 after hitting the low of 16809. Nifty closed marginally above 5000 levels at 5006, down 103 points.

Sensex sentiment

The market breadth, the number of gaining stocks to losing ones, was heavily tilled in favour of bears. Out of 2,817 stocks traded on the BSE, 864 stocks advanced, whereas 1,877 stocks declined. Seventy-six stocks closed unchanged.

Sectoral & stock screening

Bears spared none of the 13 sector indices on the BSE, with the BSE Bankex (down 2.64%) and BSE Oil & Gas (down 2.30%) being hit the worst. All the other remaining indices suffered losses in the range of 0.34% to 2.24%.

On stocks’ front, Jet Airways topped the chart surging by 5.77% followed by India Cements (up 5.25%). EIH, Hindustan Zinc and Lupin were up by over 3% each. Among losers, Sintex Industries slid the most by 6.29%, followed by Sterling Biotech that fell by 5.26% and GVK Power & Infrastructure that shed 4.65%.

Key benchmark indices witnessed sharp losses in a highly volatile trading session as world stocks fell. NSE's futures & options segment clocked record turnover as traders rolled over positions from November 2009 series to December 2009 series ahead of the expiry of the near-month November 2009 contracts today, 26 November 2009. The BSE 30-share Sensex lost 344.02 points or 2%, off 347.58 points from the day's high and up 46.06 points from the day's low. The S&P CNX Nifty fell below the psychological 5,000 mark before regaining that level at the fag end of the trading session. The Sensex fell below the psychological 17,000 level.

World stocks fell as news of Dubai asking for a creditor standstill at Dubai World and Vietnam's currency devaluation, increased investors' aversion to risk.

Selling pressure was conspicuous in banking, IT and oil & gas stocks. Index heavyweight Reliance Industries turned ex-bonus today, 26 November 2009. The company had announced a liberal 1:1 bonus. The market breadth was weak with small and mid-cap stocks under selling pressure.

Intraday volatility was high ahead of the expiry of the near-month derivatives contracts. The market cut losses after an initial slide. However, the intraday recovery proved short-lived. The market weakened in early afternoon trade as Asian stocks fell. The market cut losses after hitting a fresh intraday low in early afternoon trade. The market tumbled in mid-afternoon trade.

As per reports, rollover of Nifty positions was about 64% while market wide rollover stood at 66% at the end of Wednesday's (25 November 2009) trade. In individual stocks, Hindustan Unilever, Cairn India, India Cements, Maruti Suzuki and Power Grid Corporation have witnessed high rollover.

Chinese stocks tumbled on Thursday, led by losses in bank stocks, as investors fled the market amid mounting worries that the government may take steps to clamp down on surging asset prices. Banks fell on concerns about shrinking lending and a possible need to raise funds next year to shore up their capital.

Meanwhile, Dubai's financial health has come under scrutiny after a major, government-owned investment company asked for a six-month delay on repaying its debts. Dubai World, which has total debts of $59bn (Â£35bn), is asking creditors if it can postpone its forthcoming payments until May next year. Dubai World has also appointed global accountancy group Deloitte to help with its financial restructuring. The company has been hit hard by the global credit crunch and recession. It was due to repay $3.5bn of its debts next month.

The request for a delay in repayments led to major credit ratings agencies downgrading a number of state-backed companies. Following six years of rapid growth, the Dubai economy has slumped since the second half of 2008. The Dubai government said in a statement that the request to delay debt repayments also applied to property developer Nakheel, a Dubai World subsidiary.

The announcement raised concern about the once-booming Gulf region's financial health and added to general nervousness in financial markets about the real state of the world economy at a time when investors are also seeking to lock in 2009 profits.

Meanwhile, Vietnam's stock market tumbled after the nation's central bank devalued the currency by around 5% against the US dollar and raised interest rates by a percentage point to 8% from 1 December 2009.

The worst dry spell in nearly four decades and floods in parts of the country have hurt farm output and pushed up food prices. C. Rangarajan, Chairman of Prime Minister Manmohan Singh's Economic Advisory Council, recently said food price inflation is the biggest worry for the economy in near term and a strong rise in food prices could prompt monetary action. Inflation based on the wholesale price index rose 1.34% in October 2009 from a year earlier

Meanwhile, in a bid to converge Indian accounting norms with International Financial Reporting Standards (IFRS) by 2011, the government on Wednesday said all concerns of the industry would be addressed before convergence takes place. However, the industry fears that there are ambiguous issues which demand more clarity. The Institute of Chartered Accountants of India has still not legally notified the syllabus containing IFRS and the tax implications of the convergence are still not known.

The Reserve Bank of India (RBI) is not in favour of consolidation in the banking industry even as the finance ministry has started laying the ground for fewer and larger public sector banks. RBI deputy governor KC Chakrabarty said on Wednesday consolidation in the sector can wait and the need of the hour is to make available banking services to more Indians. Earlier in the day, RBI governor D Subbarao suggested the need for banks to strengthen their capital base to usher in better risk management.

Meanwhile, the government is likely to postpone a plan to recapitalise state-owned banks to the next financial year, as some key approvals to the process are yet to come. The World Bank had sanctioned a loan of $2 billion to the Indian government to recapitalise 15-16 state-owned banks.

Another set of reports indicated the government plans to move a bill early next year to amend a banking law for allowing foreign investors in private banks to have voting rights in proportion to their shareholdings. Currently, voting rights of foreign investors are capped at 10%.

Trade minister Anand Sharma said on Wednesday that the government has no plan to further liberalise foreign investment in retail sector. India, currently, does not permit foreign direct investment (FDI) in multiple-brand retailers, restricting global firms like Wal-Mart Stores and Carrefour from selling directly to customers in the country. Foreign holding in single-branded retailers is capped at 51%.

There are concerns that a glut in share sales may suck liquidity from the secondary market. A foreign brokerage firm expects Indian firms to raise roughly $70 billion through share sales over the next three years. The brokerage expects stake sales in state-run firms will account for $10-$15 billion of the total funds to be raised. The upcoming auction of third-generation mobile spectrum will also spur potentially billions of dollars in equity raising, although not necessarily from the public markets.

Indian companies have raised about $18 billion in equity thus far this year to repay high cost debt or to fund expansion plans. Last year, Indian firms raised $7.2 billion in equity.

European markets were trading weak today, 26 November 2009, weighed by banking and mining shares. Key benchmark indices in UK, France and Germany were down 1.86% to 2.05%.

Asian markets dropped, led by Japanese exporters as the yen firmed to near 14-year highs against the dollar. Key benchmark indices in China, Hong Kong, Singapore, Japan, South Korea and Taiwan were down by between 0.22% and 3.62%.

Stocks in Hong Kong and China dived weighed by a disappointing market debut of China Minsheng Bank Corp. The bank which raised $3.9 billion in the world's fifth-largest initial public offering of 2009, fell 1% in its Hong Kong trading debut.

Concerns of potential cash calls by the sector on expectations the government may lift capital adequacy ratios or reserve requirements for larger state lenders next year after a lending boom aggravated the slide.

China needs far-reaching structural reforms to root out industrial overcapacity, which is doing untold damage to domestic growth and the global economy, according to a report released on Thursday. Excess capacity is a long-standing scourge in China, but its impact has become ever more destructive as a result of the global financial trauma, said the study by the European Union Chamber of Commerce in China.

US stocks climbed on Wednesday, 25 November 2009 as investors welcomed a bigger-than-expected drop in weekly jobless claims. The Dow Jones Industrial Average gained 30.69 points, or 0.29%, to 10,464.40 and the Standard & Poor's 500 Index rose 4.98 points, or 0.45% to 1,110.63. Both these indices settled at a fresh 13-month high. The Nasdaq Composite index advanced 6.87 points, or 0.32%, to 2,176.05.

In economic data, the new claims for unemployment posted biggest drop last week, falling to 466,000, a 14-month low. New home sales were up 6.2% in October 2009 to an annualized rate of 430,000, at 1-year high. Personal income for October 2009 increased 0.2% and personal spending for October 2009 increased 0.7%.

US financial markets are closed on Thursday, 26 November 2009, for the Thanksgiving holiday.

The British economy shrank in the third quarter, but at a slower pace than initially estimated, the Office for National Statistics said Wednesday. Gross domestic product contracted by 0.3% compared to the previous quarter and fell 5.1% compared to the third quarter of last year.

The BSE 30-share Sensex lost 344.02 points or 2% to 16,854.93. The Sensex opened almost unchanged at 17,199.05. It lost 390.08 points at the day's low of 16,808.87 in mid-afternoon trade. It rose 3.56 points at the day's high of 17,202.51 in early trade

The S&P CNX Nifty was down 102.60 points or 2.01% to 5,005.55. It hit a low of 4,986.05 in intraday trade.

A deluge of global liquidity has boosted stocks across the globe this year. Governments and central banks around the world have injected trillions of dollars in the past one year to pull the world out of a most severe recession since the 1930s Great Depression. The Sensex is up 7207.62 points or 74.71% in calendar year 2009, as on 26 November 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 8694.53 points or 106.54% as on 26 November 2009.

Nifty December 2009 futures were at 4,980.55, at a discount of 25 points as compared to the spot closing. Turnover in NSE's futures & options (F&O) segment spurted to Rs 1,37,130.38 crore from Rs 91,235.90 crore on Wednesday, 25 November 2009. This is a record turnover on NSE's F&O segment.

The market breadth, indicating the overall health of the market was weak. The breadth had turned negative in early afternoon trade after a strong start. On BSE, 1910 shares declined as compared with 905 that rose. A total of 72 shares remained unchanged.

The BSE Mid-Cap index fell 1.45% and the BSE Small-cap index fell 0.98%. Both the indices outperformed the Sensex.

Private sector banking pivotals declined despite reports indicating the government plans to move a bill early next year to amend a banking law for allowing foreign investors in private banks to have voting rights in proportion to their shareholdings. Currently, voting rights of foreign investors are capped at 10%.

India's largest private sector bank by net profit ICICI Bank slumped 4.15% to Rs 861.80 and was the top loser from the Sensex pack. India's second largest private sector bank by net profit HDFC Bank shed 2.44%.

State run banking shares declined on reports the government is likely to postpone a plan to recapitalise state-owned banks to the next financial year, as some key approvals to the process are yet to come.

The World Bank had sanctioned a loan of $2 billion to the Indian government to recapitalise 15-16 state-owned banks.

India's largest private sector steel marker by sales Tata Steel plunged 3.95% after it reported a consolidated net loss of Rs 2707 crore in Q2 September 2009 as compared with a net profit of Rs 4772 crore in Q2 September 2008. Net sales dropped 42.82% to Rs 25270 crore in Q2 September 2009 over in Q2 September 2008. The results were announced during market hours today, 26 November 2009.

India's largest aluminum maker by sales Hindalco Industries slipped 1.81%. The company on Tuesday raised about Rs 2900 crore through private placement of shares to qualified buyers to part-finance its expansion projects.

Other metal stocks declined on profit booking. The gauge of six metals traded on the London Metal Exchange, rose 1.67% to 3,178.30 on Wednesday.

India's top truck maker by sales Tata Motors rose 0.12% to Rs 644.50. The stock gained in volatile trade after swinging in a band of Rs 611-Rs 650.70 for the day. The company will unveil its consolidated results for the quarter ended September 2009 on Friday, 27 November 2009.

India's largest private sector firm by market capitialisation Reliance Industries (RIL) settled at Rs 1057.70 after the stock went ex-bonus from today, 26 November 2009. The stock oscillated in a band of Rs 1056.60 and Rs 1110 in the day. The stock had closed at Rs 2193.75 on Wednesday, 25 November 2009.

Meanwhile, Sinopec Group, the largest refiner in Asia by capacity, and US private equity investment firm TPG are not considering bidding for a stake in bankrupt Dutch chemical firm LyondellBasell Industries. Indian energy giant RIL has reportedly offered between US$10 billion and US$12 billion last weekend for acquiring LyondellBasell Industries.

India's largest power generation firm NTPC fell 1.56%. As per reports, the government is considering cancelling the power PSU's Rs 2,000-crore contract with a Russian equipment firm Technopromexports (TPE).

Meanwhile, the Bombay High Court, on Wednesday, held that it will frame additional issues for the trial in a dispute for gas supply between state-run NTPC and Reliance Industries (RIL) on 4 December 2009. Justice Anoop Mohta has asked the parties to decide which documents submitted by either of them will be admitted or denied by the other

Rise in crude oil prices will increase under-recoveries of state-run oil firms on domestic sale of petrol, diesel, LPG and kerosene at a controlled price. Light, sweet crude rose $1.94 or 2.55% to $77.96 a barrel on the New York Mercantile Exchange on Wednesday, 25 November 2009 after a US government inventory report showed a lower than expected rise in inventories last week.

India's second largest software exporter Infosys fell 2.61% following reports it is considering acquiring companies in the consulting and health-care industries for as much as $500 million. Other IT pivotals also edged lower on profit booking. India's third largest software exporter Wipro declined 2.54% despite a 2.18% rise in its American depositor receipt (ADR) on Wednesday. India's largest software exporter TCS fell 2.46%.

Mahindra Satyam rose 2.48% to Rs 92.80 on bargain hunting after the company's top official told media that customer attrition has stopped and the firm is not resorting to price cuts to bag new deals. The stock had earlier tanked as much as 8.28% to hit day's low of Rs 83.05

Rate sensitive realty shares declined on worries of higher interest rates. The Reserve Bank of India (RBI) had late last month raised the provisioning requirements for loans to commercial real estate from 0.4% to 1% at a regular monetary policy review.

J K Cements surged 2.40%, extending gains for the second consecutive day, after one of the promoter group companies hiked its stake in the firm. The company made this announcement during trading hours on Wednesday, 25 November 2009, when the stock had risen 1.07%

Shipping stocks declined after the Baltic Dry Index (BDI), which measures the changes in dry bulk freight rates across all categories of vessels, declined 2.44% to 4,234 on Wednesday, 25 November 2009.

EIH jumped 4.52% on reports cigarette maker ITC is open to raising its stake in the company after media reported that investor Analjit Singh plans to buy another 17% in EIH.

Kwality Dairy (India) gained 1.88% after the company fixed 11 December 2009 as the record date for a 10-for-1 stock split. The company announced the record date during trading hours today, 26 November 2009.

Jet Airways (India) soared 5.77% to Rs 468.30 on reports the company is looking to hire 25-30 Indian pilots for its proposed expansion of operations.

The market is headed for an uncertain start following mixed global cues. The SGX Nifty futures for December 2009 expiry were trading 30 points lower in Singapore. Strong economic data and weak dollar lifted The Dow Jones and S&P 500 to settle at fresh 13-month high on Wednesday while Asian markets were trading mixed today, 26 November 2009 on profit booking.

Volatility on the bourses may zoom as derivatives contracts for November 2009 series expire today, 26 November 2009. As per reports, rollover of Nifty positions was about 64% while market wide rollover stood at 65%, as at 25 November 2009.

In a bid to converge Indian accounting norms with International Financial Reporting Standards (IFRS) by 2011, the government on Wednesday said all concerns of the industry would be addressed before convergence takes place. However, the industry fears that there are ambiguous issues which demand more clarity. The Institute of Chartered Accountants of India has still not legally notified the syllabus containing IFRS and the tax implications of the convergence are still not known.

Meanwhile, the Reserve Bank of India (RBI) is not in favour of consolidation in the banking industry even as the finance ministry has started laying the ground for fewer and larger public sector banks. Deputy governor KC Chakrabarty said on Wednesday consolidation in the sector can wait and the need of the hour is to make available banking services to more Indians. Earlier in the day, RBI governor D Subbarao suggested the need for banks to strengthen their capital base to usher in better risk management. As per reports, public sector bank unions have called for a nation wide strike on 16 December 2009 to protest against the proposed move.

In stock specific action, NTPC may see action as the government is reportedly considering cancelling the power PSU's Rs 2,000-crore contract with a Russian equipment firm Technopromexports (TPE). Infosys may also see action on reports it is considering acquiring companies in the consulting and health-care industries for as much as $500 million.

Asian Markets were trading mixed today, 26 November 2009. Key benchmark indices in China, Hong Kong and Singapore fell by between 0.42% to 1.06%. The key benchmark indices in Japan, South Korea and Taiwan rose by between 0.06% to 0.22%.

US stocks climbed on Wednesday, 25 November 2009 as investors welcomed a bigger-than-expected drop in weekly jobless claims. The Dow Jones industrial average rose 31 points, or 0.3% to 10464.40 while S&P 500 rose 5 points to 1110.63, or 0.5%. The Nasdaq rose 7 points, or 0.3%, to 2176.05.

In economic data, the new claims for unemployment posted biggest drop last week, falling to 466,000, a 14-month low. New home sales were up 6.2% in October 2009 to an annualized rate of 430,000, at 1-year high. Personal income for October 2009 increased 0.2% and personal spending for October 2009 increased 0.7%.

All US financial markets will remain closed today, 26 November 2009 for the Thanksgiving holiday.

The British economy shrank in the third quarter, but at a slower pace than initially estimated, the Office for National Statistics said Wednesday. Gross domestic product contracted by 0.3% compared to the previous quarter and fell 5.1% compared to the third quarter of last year.

Back home, key benchmark indices pared gains on Wednesday after hitting their highest level in more than a month on concerns a glut in share sales may soak available liquidity in the secondary market. The BSE 30-share Sensex rose 67.87 points or 0.4%. The Sensex and the 50-unit S&P CNX Nifty struck their highest closing levels in more than a month.

We recommend a buy in Vardhman Textiles from a short-term horizon. It is evident from the charts of the stock that it has been on an intermediate-term uptrend since March low of Rs 43. Moreover, with in this uptrend the stock was on a medium-term sideways consolidation between Rs 150 and Rs 180. The stock made an upward break through of the sideways range as well as long-term resistance at Rs 180 by jumping 9 per cent accompanied with high volume on November 25. The intermediate-term up trend got reinforced and the counter is hovering way above the 21- and 50-day moving averages. The daily relative strength index (RSI) has entered in the bullish zone and weekly RSI is featuring in this zone. We are bullish on the stock from a short-term horizon. We anticipate it to trend upward further until it knocks our price target of Rs 210. Trader with a short-term horizon can buy the stock while maintaining a stop-loss at Rs 180.

Bajaj Hindusthan earmarks Rs1600 crore for Power foray - Business Line

Infotech Enterprise plans two buy outs in the US for up to $40 million - Business Standard

ITC reviewing options on EIH equity - Business Standard

Oman Oil to buy new stake in BPCL JV - DNA Money

Events for the day

Major corporate action:

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Ex-date for the bonus of Reliance Industries Ltd. In the ratio of 1:1.

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Ex-date for the dividend of Gujarat State Petronet.

Pre-market report

Global signals

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The European indices rose by over 0.6% on average on the back of positive data coming from the US on the macro-economy, while the miners stock rises as gold touches new highs. FTSE 100 ended 0.77% higher at 5365.

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On Wednesday, the Dow closed at its 13-month high owing to the data positive on the macro economic front that indicated the stabilization of the labor and housing markets fading the concerns of the double-dip recession that improved the investors risk taking appetite for equities. The rising commodity price and the dollar that slumped to its 15 week low against various currencies helped the natural resources stocks to surge.

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The major Asian indices are again trading mixed, with Taiwan Weighted Nikkei 225 and Seoul Composite trading in the positive with marginal gains. While the remaining major indices are trading in the negative zone with l losses in the range of 0.48%-1.01%. At the time of writing this report, SGX Nifty gave away its yesterdays gains and was trading lower by 31 points.

Indian markets

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Sensex may open lower on the back of weak cues from the Asian front. While the volatility may continue to have its grip over the markets.

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Among the local indices, the Nifty could test the 5150-5182 range on the up side, while on the down side it could find support at 5050 and 5000. While the Sensex is likely to get support at 16900 and may face resistance at 17300.

Indian ADR's

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Among the Indian ADRs trading on the US bourses, all the ADRs closed in the green with gains except for the Satyam and Dr. Reddy's which declined by 7.92% and 0.46% respectively.

Commodity cues

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In the commodity space, the Crude oil prices recovers yesterday losses, with the Nymex light crude oil for January 2010 series suring by $1.88 to settle at $77.90 a barrel.

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In the metals space, the yellow metal eyes $1200, with the Comex Gold for December series surging heavily by $20.60 to settle at $1188.00 a troy ounce, while Comex Silver for December series rose marginally by $0.31 to settle at $18.80 to a troy ounce.

Daily trend of FII/MF investment in equities

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On November 25, 2009, FIIs were the net buyers of the Indian Stocks in the tune of Rs302.70 crore (with the gross purchase of Rs2342.70 crore and gross sales of Rs2040.00 crore).

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While the Domestic mutual funds mutual funds, on November 24, 2009, were the net seller of the stocks in the tune of Rs278.50 crore (with gross purchase of Rs599.00 crore and gross sales of Rs877.50 crore).

Welspun Gujarat Stahl Rohren has raised US$250mn by the way of institutional placement of shares and bonds. (DNA)

Bajaj Hindustan announced expansion of its power generation capacity by 400MW for Rs16bn. (ET)

Shoppers Stop has shrunk its private label offering to prevent blockage of working capital during the current year. (BL)

Surana Telecom said its board has approved demerger of the solar business of the company into another group company, Surana Ventures. (DNA)

The Government is exploring ways to improve the cash flow of funds to developers executing road projects by making funding of such projects attractive for financial institutions. (ET)

The power ministry has sought assurance from petroleum ministry over the supply of domestic gas to new power projects. (ET)

The Government has no plans to ban cotton exports as the country has sufficient stocks. (ET)

The income tax department will recover close to Rs10bn from infrastructure development companies after a recent tax tribunal order clarified that the exemption available for infrastructure development cannot be extended to contractors or subcontractors. (ET)

State Electricity Boards and power companies together owed Rs7bn to Indian Railways as on March 31, 2009. (BL)

The Department of Economic Affairs, the Ministry of Commerce and Industry and RBI have come to a consensus that FII in a company should be monitored on a monthly or a quarterly basis. (BS)

India has imposed anti-dumping duty of up to US$0.92/kg on imports of nylon tyre cord fabric from Belarus. (BS)

The Centre may give sops to drug exporters for shipments to Africa and Latin America through a route that would avoid passing through Europe. (BS)

Sugar Mills in Uttar Pradesh agree to pay Rs25 a quintal of sugarcane above the SAP as incentive. (BS)

The 13th Finance Commission is understood to have arrived at a revenue-neutral rateof around12% for the proposed GST. (FE)

The Planning Commission has set up a high-level committee headed by Arun Maira to assess the impact of power equipment imports from China and suggest action. (FE)

3-G spectrum auction to be on schedule. (FE)

The Centre's plan to create country’s first strategic reserve for crude oil has run into a regulatory hurdle as the finance ministry has refused SEZ status to the project. (FE)

Nothing is wasted, nothing is in vain, the seas roll over but the rocks remain.

A year has passed by after the tragedy in Mumbai. The city and the market have moved on in what is often summed up as the indomitable spirit. It’s Thanksgiving on every street for the bulls. November series has seen some good long positions. The Nifty December series is showing a long build-up after it closed at 12 points premium to the spot.

We expect a flat open with no clear signals from the global markets. The usual choppiness associated with the F&O expiry will be there though the bias remains mostly positive. Asian markets are mixed. A bigger-than-expected drop in weekly jobless claims added some cheer to US markets, which will remain closed today for Thanksgiving and have a truncated session on Friday.

Stock exchanges may put their plans to extend trading hours on the back-burner following lack of consensus. The only consensus for now seems to be that indices will hit a new year-high in December series. The MSCI Asia Pacific Index has gained 32% this year while the S&P 500 is up 23%.

Index heavyweights like Reliance will hog the limelight for the day. The rising market is also bringing in illiquid stocks back into trade, some after a decade. Avoid these counters.

The Standard & Poor’s 500 added 0.5% yesterday. Sales of new homes rose last month to the highest level in 13 months, while the number of Americans filing claims for jobless benefits fell last week to the lowest since September 2008. Spending by US consumers increased more in October than expected.

Other headlines in the media include:

ITC could see action as it is rethinking with respect to its approach on equity in EIH, which would mean making a counter offer or selling its stake.

Infotech Enterprises is planning to acquire two companies in the US by the end of this financial year worth US$10mn to US$20mn each.

IDBI Bank could gain on reports that the bank has identified a potential merger target.

Infosys, is set to hire 20,000 people in FY11.

TCS expects to clock Rs5bn revenue from the domestic banking business over the next one year.

Sugar Mills in Uttar Pradesh agree to pay Rs25 a quintal of sugarcane above the SAP as incentive.

The 13th Finance Commission is understood to have arrived at a revenue-neutral rate of around12% for the proposed GST.

The Centre's plan to create country’s first strategic reserve for crude oil has run into a regulatory hurdle as the finance ministry has refused SEZ status to the project.

With F&O expiry just a day away, traders stayed on the sidelines as the key indices moved in a narrow range for the entire day.

The Nifty hit a one-month high of 5,137 in the early afternoon trades but profit booking brought the index lower from day's high towards the close of the day.

The BSE Sensex ended a listless trading day at 17,199, up 68 points or 0.4% from the previous close. The NSE Nifty gained 18 points or 0.4% to close at 5111.55.

Among the index heavyweights, Reliance Industries rose 1% to close at Rs2,196 after the company re-opened retail fuel outlets. Maruti advanced further by 2% to Rs1,629 on expectations of pick up in sales this month. Hero Honda, ITC, Hindustan Unilever and HDFC Bank were among the top gainers.

Cairn, R Com, Reliance Infra and Suzlon were among the top losers within the index.

Outside the main indices, the big gainers in the broader market were Mastek, NESCO, KPIT Cummins and Orchid Chemicals. On the other hand, losers included Maytas Infra, Motherson Sumi, Indiabulls Real Estate and Tech Mahindra.

Among the sectoral indices, FMCG, Oil and Gas, PSU and Bankex gained by 1% each. Realty and pharma indices were among the major losers.

The BSE Mid-Cap index ended lower by 0.10% while the BSE Small-Cap index was down by 0.12 %.

Shares of oil marketing companies surged smartly after US light crude oil for January delivery fell $1.11 to settle at $76.45 a barrel on the New York Mercantile Exchange. BPCL rose 6% to Rs575, IOC gained 3% to Rs297 and HPCL was up by 3% to Rs359.

Shares of Uttar Pradesh-based sugar companies rose on Wednesday after the state's sugar mill association signed an agreement with the sugarcane farmers on the price for the ongoing season (October-September 2009-10).

Sugar producers with mills in Uttar Pradesh, India's biggest cane-growing state, will pay growers Rs190 rupees per quintal (100 kilograms), ending a dispute that caused a month-long delay to the start of the season. The price fixed is broadly in line with expectations.

Balrampur Chini was up 1% at Rs135, Bajaj Hindusthan gained 5% to Rs223, Triveni Engineering was up 2% at Rs106 and Dhampur Sugar advanced 4% to Rs134.

US stocks ended a volatile session with modest losses on Tuesday, as the Federal Reserve's improved outlook and some signs of improvement in housing tempered a weaker revision on economic growth released in the morning.

The Dow Jones Industrial Average lost 17 points, or 0.2%, to 10,433.71. The Dow ended the previous session at its highest level since Oct. 2, 2008. The Nasdaq Composite index lost 7 points, or 0.3%, to 2,169.18 while the S&P 500 index was barely changed, at 1,105.65.

MBL Infrastructures (MBLIL), promoted by Ram Gopal Maheshwari, Anjanee Kumar Lakhotia and Maruti Maheshwari, is a construction company focused on construction of highways, road maintenance, industrial infrastructure projects and other civil engineering projects. Not limiting itself to job contracts, the company moved up the value chain and has developed build-operate-transfer (BOT) road project through its wholly owned subsidiary APP Infrastructure. The company is also engaged in steel trading and waste management (ferrous scrap and slag recycling) at major steel plants. Contribution of this low margin waste management and trading business was 29% of the consolidated revenue in fiscal ending March 2009 (FY 2009), with the balance from construction and project development business.

Incorporated in 1995 as Maheshwari Brothers, the name was changed to the current MBL Infrastructures in July 2006. Initially, MBL was engaged in the business of recycling ferrous scrap and slag at steel plants and in steel trading, but subsequently diversified into infrastructure development (primarily road projects), serving government clients like the the Public Works Department of various state governments and the National Highways Authority of India (NHAI).

MBLIL is an integrated player with its own ready mix concrete (RMC) and bitumen plants and stone quarries/ mining. Apart from catering to captive needs, the RMC and quarry divisions of the company supplies surplus production to third parties.

In 2002, it was awarded the development of the 114-km Seoni-Balaghat-Rajegaon road project on BOT basis by Madhya Pradesh Road Development Corporation (MPRDC), with concession period of 5,440 days (or 15 years). All phases of this BOT project was fully completed in FY 2008 and are currently operational.

MBLIL was among the first batch of contractors to be awarded the contracts of the prestigious North-South-East-West Corridor by the NHAI and was the first to complete the project. It was also the first to be awarded the comprehensive maintenance of Ring Road and outer Ring Road, which are the most important corridors of Delhi. MBLIL also has early mover advantage for maintenance and operation of National Highways.

The company intends to use the issue proceeds to meet capital expenditure on procurement of construction equipments, funding working capital requirements and meeting general corporate requirements.

Strengths

Total order book end June 30, 2009 was Rs 872.12 crore excluding the share of other joint venture (JV) partners in projects bagged in JV. The share of orders bagged solely by the company amounts to Rs 585.12 crore. Of the total order book of Rs 872.12 crore, the unexecuted order backlog end June 2009 was Rs 612.47 crore. Post June 30, 2009, the company has received contracts worth Rs 202.82 crore.

The operational BOT project provides steady cash flow to the company. The toll revenue for the fiscal ended March 2009 was Rs 7.80 crore and in August 2009 the monthly revenue stood around Rs 66.72 lakh. The annual rate increase in toll rates is 7% as per the concession agreement.

The outlook is buoyant for the construction industry and more specifically the road construction, with the NHAI being more active in tendering and awarding more road projects after the UPA government came back to power in May 2009. The road sector is expected to be on a high growth path. The government of India has created a conducive environment conducive for private investments. The NHAI has set a target of 135 projects covering 13,394 km with an investment of Rs 1000 billion to be awarded by June 2010. Out of these, the NHAI plans to award 70 projects covering 7968 km with an investment close to Rs 616 billion over the next two quarters.

Having bagged the contract for comprehensive maintenance of ring road and outer ring road from the National Capital Territory Delhi on global tenders, the company enjoys early mover advantage as far as comprehensive maintenance of metro city roads. This segment offers good potential.

Weaknesses

The company has limited expertise in handling large road projects from the NHAI. So far the expertise/ experience of the company has been in small to medium size road projects from the NHAI.

On back of integrated operations with RMC and stone quarries as well as operational BOT road project, the company's consolidated operating margin at 14.4% for FY 2009 was better than that of a typical road constructor. This is despite the fact that 29% of the revenue came from low margin trading and waste management business in FY 2009. With increase in competition and expansion of project portfolio, the ability of the company to sustain this going forward has to be seen.

The top five projects account for 61% and the top three projects account for a whopping 47% of its current order book. Given this high concentration, any delay in these five projects could cripple the revenues of the company. About 96% of the current order book is made up of road projects with little exposure to other sectors.

MSP Infrastructures, a group company and promoted by promoters of MBLIL, has objects similar to that of MBLIL. As a result, there could be conflict of interest between MSP Infrastructures and MBLIL.

Two criminal proceedings/cases pertaining to dishonour of cheques were pending against the company in courts.

Valuation

Consolidated income from operation of the company for the fiscal ended March 2009 was up by 75% to Rs 513.64 crore. OPM expanding by 70 bps facilitated an 83% jump in operating profit to Rs 73.93 crore. Net profit was higher by 76% to Rs 27.40 crore. The consolidated EPS for the fiscal ended March 2009 works out to Rs 15.7 on post IPO equity.

At the offer price band of Rs 165-Rs 180, the PE works out to 10.5 times its FY 2009 earnings at lower price band and 11.5 times at the upper price band. In comparison, its peers such as PBA Infrastructure, MSK Projects and KNR Constructions quote at PE of 7.5 times, 9.6 times and 7.5 times, respectively, of their FY 2009 earning. Only J Kumar Infrastructure quotes at a higher PE at 13.7 times of its FY 2009 earning.